DealBook Briefing: What Uber’s Deal with SoftBank Signals

Good Monday morning. Breaking: G.E. just announced plans to halve its dividend to 12 cents a share as part of its turnaround effort. “We understand the importance of this decision to our shareowners and we have not made it lightly,” its C.E.O., John Flannery, said in a statement.

After all, Uber, its investors and SoftBank’s Masa Son have struck enough compromises to move forward with a long-awaited deal that would allow early shareholders to cash out of the ride-hailing colossus. Those concessions included:

• Giving up special voting rights held by early shareholders like the investment firm Benchmark

• Benchmark suspending its lawsuit against Travis Kalanick

• Mr. Kalanick letting Uber’s other directors have a say over the board seats he controls if he ever needs to fill them again

From Greg Bensinger, WSJ:

What’s next: SoftBank and its partners can proceed with an offer to buy at least 14 percent of Uber’s shares — although they can walk away if they don’t hit that target. (We want to know whether SoftBank can raise its bid and extend the tender if, toward the end of the process, the Japanese conglomerate still looks like it will fall short of its goal.)

The cautious view: Not everyone is convinced that peace has descended upon Uber just yet. “Trust but verify,” an unidentified person told Kara Swisher of Recode.

More in Masa news: Tim Culpan of Bloomberg Gadfly thinks the SoftBank founder has set himself up as “the savior of overpriced start-ups.”

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Today’s DealBook briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.

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The newest version of the House bill may have done little to meaningfully affect carried interest, but buyout firms are planning to fight back against limits on the deductibility of corporate debt payments. That would make the core business of private equity — buying and selling companies, in deals financed to some degree with borrowed money — much more difficult.

From Madison Marriage, Javier Espinoza and Sam Fleming in the FT:

Where we now stand: The House is set to vote on its tax plan by the end of the week. Lawmakers in the House and the Senate are scrambling to counter economic models showing that both proposals would ultimately add to the national debt, according to the NYT.

Don’t cut our taxes: More than 400 millionaires and billionaires, from George Soros to the founders of Ben & Jerry, are sending a letter to Congress this week opposing the Republican plans. “This makes no sense,” Bob Crandall, a former American Airlines C.E.O. and a signatory of the letter, told the WaPo.

Some Republican lawmakers have conceded that — contrary to statements by President Trump and party leaders — not all Americans will see their taxes lowered, and some will see their obligations rise, according to the WaPo.

Tax notes

• Critics of the interim commissioner of the I.R.S., David Kautter, have pointed to his work in the private sector helping clients avoid paying billions in taxes. (The Daily Beast)

• In a video, Senators Elizabeth Warren and Al Franken, both Democrats, reached this conclusion about what companies would do with tax cuts: “More money for the investors!” (Ms. Warren’s Twitter)

• California lawmakers and activists think their state is being deliberately punished by congressional Republicans. (NYT)

• One Democratic donor, Stephen Cloobeck, the C.E.O. of Diamond Resorts International, threatened to cut off his support of the party if they didn’t stop criticizing the rich. (Twitter)

On the one hand: Let’s band together to stop North Korea. On the other: Find your own way on trade. (But could his pronouncements be drowned out by his latest Twitter invectives against Kim Jong-un and critics of the Trump administration?)

A boon for Canadian lobster:While Mr. Trump takes a tough line on new trade pacts, foreign partners are wary of agreeing to those terms — leaving room for competitors like Canada to sign deals quickly. )

Item #1, from Ryan Tracy and Christina Rexrode, WSJ:

Item #2, from Telis Demos, WSJ:

Executives at the two companies privately worry that the Trump administration wants CNN to be sold to get the deal done. Justice Department officials dispute that, although they have asked for the sale of either Turner Broadcasting, which includes CNN, or DirecTV.

On Air Force One this past weekend, Mr. Trump denied intervening in the government’s decision-making process, saying, “I do feel you should have as many news outlets as you can — especially since so many are fake.”

But the WSJ has reported that when Jared Kushner met with a top executive at Time Warner earlier this year, Mr. Kushner said that CNN should fire 20 percent of its staff because the cable channel was wrong in its analysis of the 2016 election.

A group of senators, led by Amy Klobuchar, Democrat of Minnesota, has asked the Justice Department whether the president had pressured its antitrust division.

What now for media consolidation? There are a lot of proposed (and potential) combinations in the industry, and Michael asked on Friday if what’s happening with the Time Warner deal could chill that merger talk.

Now that Alabama’s governor has ruled out delaying the Dec. 12 special election, Mr. Moore appears to be locked in as the Republican nominee for the Senate there. Should he lose — not a given — Republicans would have just a one-seat majority in the Senate, imperiling their ability to move legislation. Senate Republicans have largely abandoned Mr. Moore, although the White House hasn’t at this point.

At the same time, a stream of accusations has hit statehouses from California to Florida, according to the NYT.

In Hollywood

• Louis C.K. has been dropped from FX Networks, which has a production deal with his Pig Newtown company and from Universal’s “The Secret Life of Pets 2.” (Deadline, Variety)

• Gal Gadot, the star of “Wonder Woman,” won’t participate in a sequel to the hit movie if Warner Brothers doesn’t remove Brett Ratner, the Hollywood director and producer accused of sexual misconduct, as a financier of the film, according to an unidentified source. (NY Post)

• Andrew Kreisman, a producer of CW shows like “The Flash” and “Supergirl,” has been suspended following accusations of sexual harassment. (Variety)

How men in the workplace are responding: Some are forming all-male texting groups to discuss harassment issues and others are wondering whether flirting or hugging is acceptable. (NYT)

A message to male techies: “World War II is a reminder that, when freedom hung in the balance, inclusion kept us safe,” the author Liza Mundy writes in an NYT Op-Ed, pointing to the large number of female code-breakers during that war. (NYT)

As owners debate how to speed contract negotiations with Roger Goodell, while Jerry Jones of the Dallas Cowboys threatens to sue if that happens, we have to ask: Can the league find unity again?

There are many issues to contend with, including player protests, declining TV ratings, and the debate about concussions. The fissure between Mr. Jones and the other owners could prevent the league from coming together on efforts to address all those. “This is not the way we do things in the N.F.L.,” Arthur Blank of the Falcons told Mr. Jones on a call last week, according to Sports Illustrated.

What N.F.L. owners will discuss today: Mr. Goodell’s most recent proposal, which includes annual compensation of $49.5 million, the lifetime use of a private jet and lifetime health insurance for his family, according to ESPN, citing an unidentified person.

Elon Musk wants you to stand by for breaking news. Aaron Levie of Box summed up Silicon Valley’s reaction: “I’m going to go out on a limb and say there probably have never been semi truck announcement viewing parties before this Thursday.”

But we’d be remiss if we didn’t point out Tesla’s stock performance over the past month:

A longtime Tesla skeptic, @Diogenes, retweeted Mr. Musk’s post and snarkily commented, “Squirrel!”

Both Barron’s and the NYT Magazine asked this weekend whether Tesla was in danger of being usurped by the car companies it was meant to disrupt.

In more auto news

• “Can Ford Turn Itself into a Tech Company?” (NYT)

• Arizona has quietly made itself the hub for testing self-driving cars. (NYT)

• In her final column for the NYT, Gretchen Morgenson looks back over two decades and remembers one Wall Street firm’s celebration after it won an arbitration case: The firm’s general counsel “told me that the menu had featured a photograph of me, placed inside a red circle with a slash through it.” (NYT)

• John Flannery will introduce a road map today for General Electric that will focus on the group’s three biggest business lines — aviation, power and health care — but that will stop short of a breakup or more radical restructuring, according to a person familiar with the matter. (WSJ)

• Brookfield Property Partners has made a $14.8 billion offer to buy the shares of the mall owner GGP that it doesn’t already hold, according to people familiar with the matter. (WSJ)

• The Securities and Exchange Commission’s inspector general, Carl Hoecker, whose job is to root out malpractice at the agency, is the subject of complaints by several whistle-blowers. (WSJ)

• Whitefish Energy Holdings had a contract that allowed it to bill the Puerto Rican public power company much more than the usual rate for emergency work, which has led to scrutiny of all other contracts involving Puerto Rico. (NYT)

• To realize his dream of privatizing Aramco, Saudi Arabia’s crown prince needs to show potential investors that his recent purge of the kingdom’s elite is the first step on the road to a brave new country, rather than just a purge of opponents, Julian Lee says. (Bloomberg Gadfly)

• With the sense that governments can no longer be relied on to prop up asset markets, is it time for investors to leave the party? (The Telegraph)

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